With Brexit has come the biggest UK political change for generations. What does it mean for green business?
UK votes to leave EU
For once, there can scarcely be anyone in the UK unaware of the top story; the UK has voted to leave the EU.
At this stage, it is difficult to track any certainty while scanning the horizon to predict Brexit’s impacts. Prior to the vote, the low carbon lobby felt conclusive that Brexit would be bad for low carbon, harming energy bills and energy saving technologies and businesses.
Only time will tell whether that assessment was true.The frenzied political fallout has cost the UK and Europe time and money. New Prime Minister Theresa May is acting quickly to address political uncertainty; conducting a major cabinet reshuffle within her first day of office.
Big news for green business this week was that the Department of Energy and Climate Change (DECC) has merged with the Department of Business, Industry and Skills (BIS) to form a new ‘Department of Business, Energy and Industrial Strategy’.
The new department will be fronted by former Communities Secretary Greg Clark MP, who served as Shadow Energy Secretary for the Conservative Party from 2008 to 2010.
What this means for the UK’s low carbon agenda is still to be determined; industry reaction was varied.
“DECC’s disappearance raises urgent questions. To whom falls the central statutory obligation, contained in the Climate Change Act 2008, to reduce the UK’s carbon emissions by 80% from their 1990 baseline? Which Department will take responsibility for the energy and climate aspects of negotiations to leave the EU? Who will champion decarbonisation in Cabinet? Who will drive innovation in the energy sector?”
Chair of the ECC Committee Angus Brendan MacNeil MP
Richard Black, Director of the Energy and Climate Intelligence Unit was more optimistic: “The disappearance of DECC as a stand-alone government department will of course raise concerns that the UK is going to ‘go soft’ on climate change. However, Theresa May has assured Conservative MPs that her government will continue to be an international leader on climate change, and it would be odd not to continue with that when all the most important new trading partners in our post-Brexit world, such as China, India and the United States, are themselves making massive investments in a clean energy transformation.”
More than anything, policy stability in coming months is what green business, and the overall UK commercial sector are now craving.
5th Carbon Budget
Quietly, and with little ceremony, the 5th Carbon Budget has passed through a Commons obsessed with Brexit ramifications.
The Carbon Budget legalises the UK’s drive to lower carbon emissions by 2030. With the right policy measures to progress the top level targets, it hopes to keep the UK on a cost-effective path to the 2050 legislated commitment to reduce UK emissions by 80% on 1990 levels.
With luck, it will continue the UK’s rate of emissions reduction. Many commentators are delighted the Budget has passed, hoping it illustrates the UK can maintain a world leading position on climate mitigation whether inside or outside the EU.
For the Budget to work, it actually needs concrete policy however, much of which isn’t in place yet, for example on future trading schemes on carbon emissions and reduction.
So whilst the Budget itself hints the UK can maintain a positive stance on low carbon, more time is needed to put long term measures and policy in place to hit the goals. Will Parliament have time left for this, or any real life policy work, while obsessing with leadership challenges and Brexit implications?
Implications for August
The Brexit vote has polarised the UK like never before, split politics down the middle, ruptured key political parties and had a wider impact on the world stage too.
But with Theresa May’s appointment, day to day business is getting back on track. By the time our next monthly horizon scan is published, is it be hoped that green business, and UK business as a whole, will be offered some clarity by politicians who, knowingly or not, have ushered in a period of intense uncertainty.